Investment in student accommodation reached a record £2.7 billion in 2012 – a 125 per cent increase on that invested in 2011, new research from CBRE has revealed.

Despite an overall decline in the number of students, investment in accommodation has risen rapidly over the last three years; it is now nearly eight times higher than in 2009.

The biggest transaction last year was the recapitalisation of University Partnerships Programme (UPP) Regional Portfolio. Dutch pension fund manager PGGM recapitalised Barcap’s 60% stake in UPP’s assets, with an estimated value of £840 million.

Jo Winchester, Head of Student Advisory, CBRE, said:

“Although the number of student applications and acceptances fell in 2012, capital committed to the sector has grown dramatically over the last 12 months. Our latest 2012 data shows that student housing is outperforming other asset classes by some margin, as it has delivered 9.6 per cent total returns in 2012.

“This compares to 4.4 per cent for all offices and 2.2 per cent for all retail over the same period. The marker is increasingly dominated by specialist student funds and developers, who are deploying large amounts of capital in the regions as well as within London, making student accommodation a healthy sector nationally.